United States District Court judge Gary A. Feess has a horrible Christmas present for Watchmen fans. The judge concluded on Wednesday that 20th Century Fox “should prevail on crucial issues” in their lawsuit with Warner Bros over the rights to the comic book movie adaptation. According to the New York Times, Feess says that “Fox owns a copyright interest consisting of, at the very least, the right to distribute the Watchmen motion picture” and that “The parties may wish to turn their efforts from preparing for trial to negotiating a resolution of this dispute or positioning the case for review.” The trial had been scheduled for January.

You’re probably wondering what this decision means to you, the eager movie ticket buyer. Let me preface this by saying that I’m not a lawyer, but this is what I have gathered from the various legal articles I have consumed over the last few months. To start, it means that Warner Bros likely has no rights to distribute a film based on the Watchmen graphic novel. They could appeal this ruling and continue to fight, what is appearing to seem like an unwinnable battle, or start negotiating with Fox on some sort of settlement. An earlier LA Times report states that:

“The more likely outcome is Fox studio chief Tom Rothman or Warners’ head Alan Horn striking some sort of compromise deal in which the studios share the movie’s costs and proceeds. But because Warners already is sharing the portion of the film it didn’t sell to Paramount with financing partner Legendary Pictures, the studio doesn’t have that much to divvy up.”

The talks will likely result in a deal that will give Fox co-distribution rights to the film, or even full rights to the motion picture. It seems doubtful that Fox would squash the release of the film altogether, but from what I understand, that possibility exists. Making a deal with Warner Bros could be a dangerous precedent for the company to make to make in terms of copyright ownership.

That said, I would be surprised if a deal doesn’t go down. Also, I would be surprised if Watchmen keeps it’s March release date. If Fox and Warner Bros can’t ink a deal before mid January, the Judge will issue the injunction to prevent the release of the film in March.  I doubt that the two companies will come to a deal in the next two weeks, so its very possible that the film might be pushed back to Summer. Nikki Finke says that “if WB goes own the appeal road, then Watchmen may not come out until 2011 considering the glacial speed which the court system move.” There will be a lot more to this story, and we will keep you updated as the news comes in.